Has an effective system of global governance now become a reality?

Global governance is the management of global policies in the absence of a central government. States in a global governance system co operate because they see that it is in their interest to do so - global governance has therefore emerged out of an acceptance by states that in a growing number of policy areas, the problems they face cannot be solved by individual states acting alone. Global governance differs from global hegemony and world government in that each of these must have a supranational authority (authority higher than that of the nation state, that is capable of imposing its will on nation states) - it therefore implies that international anarchy can be overcome without founding a world government or having to endure a world hegemonic order.

The emergence of the Bretton Woods system in 1944 can be seen as the start of global (economic) governance.The Bretton Woods system is a good example of multilateralism which has become increasingly prominent post 1945. However it must be noted that the US heavily influenced the system  - it led the negotiation and effectively dictated some of the outcomes.

 While global governance encompasses a wide range of multilateral agreements, networks, norms and formal institutions, the three institutions set up in the wake of the Bretton Woods conference can be seen as the most important. They are: the International Monetary Fund (IMF), the World Bank, and GATT, which was replaced by the World Trade Organisation (WTO) in 1995.

The IMF is one institution which can be used to argue that an effective system of global governance is in place - initially it was successful in overseeing the system of fixed exchange rates put in place by the Bretton Woods system, and after this system was abandoned in favour of floating exchange rates in 1971 it took on a new role, increasingly lending to the developing world and transition countries after the 1990 collapse of communism. Its structural adjustment programmes, which impose neoliberal values such as (privatisation of industries and austerity) on countries that receive its loans, can be seen as part of an effective system of global governance as they ensure the spread of neoliberalism and the values of the Washington consensus as a global policy. It could be argued that this is less an example of global governance, however, and more an example of US hegemony and its spreading ideology. A criticism of the IMF has been that it is systematically biased in favour of developed countries in the global north, and has been used as an instrument of US policy.

The IMF and the World Bank both have similar weighted voting systems that take into account countries strength in the global economy, so cannot be considered the most democratic example of global governance. Through its IMF style structural readjustment policies and a stress on export led growth rather than protectionism, it has often seen an increase, rather than a reduction in poverty in developing countries. It could be argued that this is an example of an effective institution of global governance, if the aim of global governance was to widen development disparities and to disadvantage developing countries. However reform of the world bank has seen an additional seat allocated on its board of directors for sub-Saharan Africa, as well as an increase in the voting power of developing countries to 47%, making it far more democratic as an institution of global governance.

GATT's contribution to global governance was as a set of norms and rules, and while its role was limited as it fell short of becoming an institution, it was successful in reducing tariffs on manufactured good from 40% in 1947 to just 3% by 2000. This can be viewed as an example of global governance in that countries successfully negotiated an agreement that would benefit all. By comparison, the WTO has been far more successful, especially in settling disputes between trading partners - settlement judgements an only be rejected if they are opposed by all members of the dispute settlement body, to which all members states belong. This has effectively made the WTO the primary instrument of international law in terms of trade.  The WTO is also a far more democratic constitution than the IMF and the world bank in that decisions are made on a 'one country, one vote' basis, giving considerable weight to the views of developing countries which make up 2/3 of its members. However, developing countries are often disadvantaged as they have been excluded fro the club-like meetings held by developed countries and the bulk of unfair trading allegations are made against them - this has led to the WTO being labelled a 'rich man's club' and not a representative or effective means of global governance.

Lastly, while trading blocs like the EU and NAFTA can be seen as effective organisations of regional economic governance, the three main institutions of truly global governance have arguably been ineffective - they are usually unable to extend their influence to non member states and so are limited in their ability to 'govern' on a global scale. They are also unable to control the US, which has used its hegemonic status to tailor these institutions to impose its neoliberal ideology on the rest of the world. So while I would argue that an effective system of global governance is not a reality, I do think that a system of neoliberal values (the Washington consensus) is fast becoming a global norm.